NorZinc Ltd. [NZC-TSX, NORZF-OTCQB] said Monday it has agreed to sell a basket of mineral properties in central Newfoundland to Canterra Minerals Corp. [CTM-TSXV, CTMCF-OTCQB] in a $2.6 million transaction. The sale will allow NorZinc to focus solely on its flagship Prairie Creek lead-zinc-silver mine, which is located in the Northwest Territories.
Monday’s announcement comes after NorZinc recently launched a preliminary economic assessment for a 2,400 tonnes per day production plan at the Prairie Creek project.
Of the four properties being sold, three contain NI-43-101-compliant resource estimates, and two contain grades greater than 1.0 g/t gold. The four properties are the South Tally Pond property [hosting the Lemarchant deposit], the Tulks South property [hosting the Boomerang-Domino and Tulks East deposits], the Long Lake property [hosting the Long Lake Main Zone deposit], and the Victoria Mine property [host to a historical copper mine].
After the transaction is complete, Canterra’s total property position in the central Newfoundland gold belt will be approximately 412 square kilometres, allowing for expansion of exploration efforts across the central Newfoundland gold district.
Under the agreement, Norzinc will sell the assets to Canterra for $2.61 million, consisting of $250,000 in cash, payable on closing, and 6.62 common shares of Canterra at 35.7 cents per share. On October 1, 2021, Canterra shares were trading at 30 cents in a 52-week range of 50 cents and 15 cents.
Canterra is a Newfoundland-focused exploration company. It is currently earning a 100% interest in the Wilding and Noel Paul gold projects, which are located 50 kilometres south, by logging road from Millertown and directly northeast of Marathon Gold Corp.’s [MOZ-TSX, OTC-MGDPF] Valentine Lake gold project in central Newfoundland.
Canterra said it will begin targeting work on the properties to be acquired from NorzZinc following completion of the Fall 2021 drilling program, which is currently underway at its Wilding property.
NorZinc’s main asset is the Prairie Creek Mine. It was originally a silver mine that operated in the early 1980s, but shut down due to low prices. “It has a lot of infrastructure on site, but it really is a zinc-lead-silver mine,’’ said former NorZinc CEO Don MacDonald in an interview that is posted on the company’s website.
The mine has a reserve of about 8.0 million tonnes of 23% zinc equivalent. On top of that is an inferred resource of about 7.0 million tonnes of grade 11.3% zinc, 7.7% lead and 166 g/t silver, material that could increase the expected lifespan beyond 15 years if it can be updated to the measured and indicated category.
NorZinc said it is continuing to advance the Prairie Creek project, including the recent announcement of a permitting milestone, which allows the company to advance permits for a 2,400 tonne-per-day production plan without the need for an additional environmental assessment.
On October 1, 2021, NorZinc shares were trading at $0.05 in a 52-week range of $0.095 and $0.045.